If I wanted water, I would have asked for water.


Friday, January 15, 2010

Mysteries of the Beer Biz Considered

On his blog, Patrick Emerson praises the arrival of Red Chair in 12-ounce bottles, but is mystified. Why is it so much cheaper when it arrives in regular bottles than the 22-ounce release?
Estimates exist of scale economies in brewing overall (i.e. the size for the brewery), but I wonder if any beer geeks can enlighten me about scale economies when it comes to producing a particular beer? It seems to me that this must be a big part of the story.
I'd be interested in the answer to this, too. I did pick up some interesting, related info yesterday at a private fete hosted by the Widmer Brothers. (And it was literally hosted by them, not the company.) They were buttering up the press on the occasion of W '10's release with good food, good conversation, and good beer. Fortunately, I had already gotten my review in, so I was able to enjoy the event without fear of losing perspective.

In any case, at one point the brothers and a part of the brewing corps (numbering a dozen or so) stood up to take questions. An interesting conversational thread emerged when someone observed that this kick-off event seemed to follow the kick-off of the beer. The reason had to do with the success of this year's Brrr. Long before a seasonal beer is ready to be shipped, a brewery has to make decisions about how much to brew. They order the corresponding number of six-pack containers, labels, and so on, and then make the beer. If it sells very well, there's no time to get another batch in the pipeline--they just can't turn the battleship around that fast.

So, in this case, they had to move the Pitch Black IPA up two weeks. If they hadn't grocery stores would have an empty slot on their shelves, and this is apparently a big problem for everyone.

On a related point (one that strays, however, yet further afield from Patrick's query), the W series has been a fascinating test of the brewery's ability to predict successful beers. Of the six years they've been doing it, three have become regular beers--Broken Halo ('05 IPA), Brrr ('06 Hoppy Red Ale), Drifter ('07 Pale Ale). But the other two weren't great sellers. I asked if they felt like this was helping them get a sense of the market. Now, keep in mind that this is a brewery that has been around for 25 years and releases a bunch of beers every year--hundreds since they started. Answer? No, they have no idea. Selling beer is witchy business, and you never know what's going to sell.

Incidentally, those dozen brewers collectively come up with a new beer for the series every year, and the W '11 is wide open. Assuming that BridgePort passes up my genius advice that they brew an old ale for the Big Brews spring seasonal (and I do assume it), perhaps I still have another shot. Either that or a mild. Or a grisette. Or ...

3 comments:

Jack R. said...

Fascinating tale, great post.

Anonymous said...

I too am curious about the way Deschutes prices their bottled beers. Why is it that 1/2bbls of Abyss are just a few dollars more than their main line beers while bottles are wholesaling for double the price?

jfwells said...

Well isn't it obvious? Red Chair (or any other beer) in the 22 oz. bombers costs more on a per ounce basis than in the six packs because that is what the market will bear. It is going to cost the same to brew it. There might be a slight difference in the cost to bottle, but not nearly enough to account for the cost to the consumer. The customer that buys bombers is used to seeing them anywhere from $4 to $10 a bottle. They buy them because they typically are beers not found in sixers and are willing to pay a bit more. Deschutes prices their sixers in line with the other big craft brewers, so that is what a consumer expects to see.

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